Yankees Are Buying Back YES Network From Fox, Disney

(Bloomberg) -- The New York Yankees are moving forward with plans to buy back the YES Network, the regional sports network that was sold to 21st Century Fox Inc. four years ago, according to a person familiar with the matter.

The Yankees have relayed their intentions to both Fox and Walt Disney Co., which is poised to acquire most of Fox in a $71 billion deal, said the person, who was asked not to be identified because the discussions are private. The Major League Baseball team has lined up financing from several strategic investors, said the person, without offering specifics.

The Yankees, which retained 20 percent of YES after Fox deal in 2014, declined to comment. Fox also declined to comment, while Disney didn’t immediately respond to a request for comment.

Bloomberg News reported in June that the Yankees had the right to buy back YES in the event Fox put it up for sale, setting the stage for the current discussions. The deal calls for the team to pay fair-market value to require the network. Guggenheim valued the bundle of for-sale RSNs at about $22 billion.

The New York Post reported on Sunday that the Yankees are in talks to reacquire YES.

The fate of Fox’s regional sports networks, including YES, is the biggest unresolved piece of its pending megadeal. Disney agreed to offload the channels to get regulatory clearance for the merger, which unites two of the biggest media and entertainment companies. Disney already owns ESPN, which reaches roughly 90 million cable customers.

But it’s not yet clear who will buy those assets. A new Fox focused on sports and broadcasting could ultimately acquire most of them, putting them back under that corporate banner.

Waiting for Notice

The Yankees are required to get 60 days’ notice of any proposed sale of YES. The team hasn’t yet received that message, though it should be coming soon, the person said. Once the Yankees are informed, they have 60 days to officially inform the seller that they’re exercising their buyback intention, the person said.

The networks for sale carry the games of more than 40 teams across three major leagues: MLB, the National Basketball Association and National Hockey League. YES, for instance, airs Brooklyn Nets games -- in addition to its Yankees coverage.

YES is by far the most valuable of Fox’s regional sports networks, or RSNs, and others are watching to see how the Yankees proceed. Allen & Co. and JPMorgan Chase & Co. are managing the auction, and the networks have reportedly drawn interest from private equity firms and media companies.

Several pages of the deal book sent to proposed buyers are dedicated to the YES Network, even though it’s unlikely to be included in any sale, according to people who have reviewed the material.

RSNs are lucrative because the audience is made up of die-hard fans consuming a live event. That makes it easier to target viewers with advertising. But the RSN sale doesn’t include digital rights to baseball.

To contact the reporter on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum

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